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The decision to hire an outside firm to handle construction of a new patient tower at one of Maryland's busiest hospitals is helping to prevent that project from becoming Michael Curran's next $175 million headache.In January, Curran, the executive vice president and chief financial officer for MedStar Health, was preparing for a bond sale to fund the new patient tower at Baltimore's Franklin Square Hospital, one of seven in the Columbia, Md.-based system. The annoyances of dealing with contractors, subcontractors, construction timing and cost overruns were something neither Curran nor anyone on the corporate office staff had the time to handle. "We didn't have someone who could spend the amount of time necessary for the project," Curran says. "The people we have who are capable of it have full-time jobs already."Many hospitals or smaller systems don't tackle enough large construction projects to develop and retain construction management expertise in-house, so they turn to outside firms to bring in large projects on time and on budget. "Some of the larger centralized systems have in-house staff who can do big projects like these," says Jim Young, vice president of program management at Chicago-based Lillibridge Healthcare Services, the company Curran hired to manage the Franklin Square project. "Mid-size systems and individual hospitals can't offer a career path to the best managers in the industry. There's no place for them to go after they build that one big project."Set to open in 2010, the patient tower will enlarge Franklin Square on its current campus from about 345 staffed beds to more than 400. Curran adds that the biggest advantage of seeking outside help is the breadth of knowledge about what has worked well in other systems. Further, Curran says his program manager has fought the battles before and knows how to elicit a quick decision at either the hospital or system level. "The development of a decision matrix on how decisions will be made is incredibly helpful for us," he says. "They know when something needs to be elevated to corporate level and when it does not."Though fees for such services can rival or even exceed the salary of a full-time project manager, such fees can be rolled into the cost of the construction project and don't show up on the balance sheet-unlike salaries. Curran says regardless of where the fees fit in the financial reporting structure, it's money well spent."No one likes paying additional fees," he says, "but you'll save more from their expertise than you spend."-Philip Betbeze




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